Stories
Inflation Squeezes Indian Budgets: Grocery Spending Down, EMI Burden Up
- •84% of Indian consumers struggle with budget management or making ends meet, indicating increasing financial pressure.
- •Household expenditure growth rate has almost halved, despite an overall increase in total spending.
- •Spending in rural India increased by 15%, while urban India saw a 4% decline, showing regional disparities in spending patterns.
- •Share of spending on groceries decreased from 24% to 22%, while education and EMIs now account for 10% each of the budget.
- •Durable goods purchases in rural areas increased via EMIs, but low monsoon rainfall could impact future EMI payment capacity.
Key Questions Answered
In the first quarter of 2026, the average quarterly expenditure of households reached ₹59,857, representing a 13% increase compared to the same period last year. However, the overall total household expenditure growth rate has slowed down to about 7%, which is almost half of its previous growth rate.
Spending trends varied noticeably between regions, with expenditure in rural India increasing by 15% while urban India saw a 4% decline. Furthermore, durable product purchases increased in rural areas driven largely by EMIs and GST changes, though low monsoon rainfall threatens future repayment abilities.
The share of spending on groceries and provisions dropped from 24% to 22%, whereas families began allocating about 10% of their budget each to education and monthly loan installments (EMIs). Additionally, healthcare and treatment expenses rose from 9% to 10% of the total household budget.
